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Joseph Torres, Bernard Torres, and Charlotte Torres v. Steven J. Baum

June 24, 2011


The opinion of the court was delivered by: Randolph F. Treece United States Magistrate Judge


Presently before the Court is the Plaintiffs' Motion to Amend and Correct their Complaint. Dkt. No. 24, Pls.' Mot. to Amend, dated Apr. 14, 2011.*fn2 On April 29, 2011, Bank of America filed its Opposition to the Motion.*fn3 For the following reasons, the Motion to Amend is denied.


A. Complaint

On November 16, 2010, the Plaintiffs initiated a lawsuit alleging that the Defendants violated the Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. § 1692, et seq. Dkt. No. 1, Compl. In reviewing the Complaint and its attachments, the Court is able to glean the following:

Charlotte Torres and Joseph A. Torres, who is now deceased, owned 12 Madison Street, Schenectady, New York, which was subject to a mortgage. Dkt. No. 24-7. Over the years, this particular mortgage was reassigned amongst various financial institutions and eventually was assigned to the Bank of America. Id. On April 18, 2001, Charlotte and Joseph A. Torres (hereinafter "Torreses") filed a Chapter 13 Bankruptcy Petition and, at that time, the mortgage was held by EMC Corporation (EMC). Compl. at ¶ 10. Pursuant to a "crammed down"*fn4 agreement, which was converted into an Order, the Bankruptcy Trustee was responsible to pay EMC $19,000, which reduced the mortgage for Charlotte and Joseph A. Torres to $41,000.00 with an interest rate of 7%. Dkt. No. 24-4, Bankr. Order, dated Aug. 1, 2007. Further, the Torreses were required to pay EMC $30,826.82 for advanced escrow payments in monthly installments of $900.00, however, they would not be required to make any further escrow payments. Id. at pp. 1-2.

The Complaint indicates that after the Trustee paid $58,000 to EMC, the mortgage was considered to be paid in full. Compl. at ¶ 15. At some point, the mortgage was assigned to the Bank of America. Id. at ¶ 16. During the month of April 2010, the Baum Law Firm, who was representing Bank of America, sent a letter to Charlotte Torres advising her that the unpaid principal, interest, and escrow balance due was $167,041.73, and, on April 5, 2010, commenced a foreclosure action against Charlotte Torres in New York State Supreme Court. Compl. at ¶¶ 19-20; Dkt. Nos. 24-5, Baum Lt., 24-6, Foreclosure Summons. That State foreclosure action is pending.

Primarily because of (1) the foreclosure action, (2) the Plaintiffs' belief that the Defendants ignored the "cramdown" agreement and discharge Order from Bankruptcy Court, and (3) the Defendants had "mischaracterized the status and the amount of the debt" in their attempt to collect fees and interest, the Plaintiffs commenced this litigation on November 16, 2010, alleging that the Defendants violated FDCPA, 15 U.S.C. §§ 1692f(1)*fn5 (Count 1), 1692e*fn6 (Count II), and 1692d*fn7 (Count III). Compl. at ¶¶ 20-30.

B. The Proposed Amended Complaint

Now the Plaintiffs wish to amend their Complaint to (1) remove Defendant Steven Baum's name from the lawsuit, see supra note 1, (2) join Chase Bank, N.A. as a defendant, and (3) add the causes of action of negligence and gross negligence. Dkt. No. 24-2, DiMaggio Affirm. at ¶ 2. By joining Chase Bank, N.A., the Plaintiffs contend that Chase N.A. inherited the mortgage account, which was already fully paid, from EMC, and "therefore holds the Note and has title and interest to Plaintiff's Note and Mortgage;" "Chase [] transferred the loan to Bank of America . . . for the purpose of collection;" and, therefore "Chase is responsible for authorizing the foreclosure of the residence on a mortgage which had been paid in full." Id. at ¶¶ 8-12. Further, the Plaintiffs wish to complain that both Bank of America and Chase Bank, N.A., were negligent and grossly negligent in maintaining Charlotte Torres's mortgage account and pursuing a foreclosure action. See Dkt. No. 24-3, proposed Am. Compl. at ¶¶ 35-53.

Bank of America opposes the Motion on the grounds of futility. Dkt. No. 25.


A. Motion To Amend Standard

FED. R. CIV. P. 15(a) states, in pertinent part, that leave to amend a pleading should be "freely given when justice so requires." Ellis v. Chao, 336 F.3d 114, 127 (2d Cir. 2003). Indeed, leave to amend should be denied only in the face of undue delay, bad faith, undue prejudice to the non-movant, futility of amendment, or where the movant has repeatedly failed to cure deficiencies in previous amendments. Foman v. Davis, 371 U.S. 178, 182 (1962); Kropelnicki v. Siegel, 290 F.3d 118, 130 (2d Cir. 2002) (citing Chill v. Gen. Elec. Co., 101 F.3d 263, 271-72 (2d Cir. 1996)). District courts are vested with broad discretion to grant a party leave to amend the pleadings. See Local 802, Assoc. Musicians of Greater New York v. Parker Meridien Hotel, 145 F.3d 85, 89 (2d Cir. 1998). "The party opposing a motion for leave to amend has the burden of establishing that granting such leave would be unduly prejudicial." New York v. Panex Indus., Inc., 1997 WL 128369, at *2 (W.D.N.Y. Mar. 14, 1997) (citing Saxholm AS v. Dynal, Inc., 938 F. Supp. 120, 123 (E.D.N.Y. 1996)); ...

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